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An interview with Dave White, a water expert at Arizona State University, about what a breakthrough along the Colorado River really means
Arizona, California, and Nevada announced a deal on Monday to reduce the amount of Colorado River water they use, ahead of a bigger overhaul planned for 2026. The agreement is crucial, likely keeping the river from reaching dangerously low levels that would have put water supplies for major cities and agricultural regions at risk. But Colorado River water policy is often knotty and confusing, and it can be difficult to wrap one’s head around just what kind of impact deals like this can have.
To that end, I called up Dave White, the director of the Global Institute of Sustainability and Innovation at Arizona State University and chair of the City of Phoenix’s Water/Wastewater Rate Advisory Committee. He explained how things work now, what the deal means, and how he’d like to see things change in the future — particularly in 2026, when the current set of water allocation rules expire and are replaced. Our conversation has been edited for length and clarity.
There are more than 100 years of law policy agreements, which we collectively call the law of the river. But the most relevant is an agreement called the 2007 Interim Operating Guidelines for the Coordinated Operations of Lake Powell and Lake Mead. That’s the long name, but we typically call it the 2007 agreement.
That agreement created a set of rules that, as the name indicates, helped to guide the operations of Lake Powell and Lake Mead. And along with subsequent agreements, particularly the drought contingency plans in 2019, it has guided the management of the reservoir system on the Colorado River and set forth the allocations managing the flow to the lower basin states.
Right now we’re in the time period between when the interim guidelines were established in 2007, updated with drought contingency plans in 2019, and when we’ll hit a deadline for a new set of operating guidelines in 2026. And so all of this is trying to manage the risk from the reduced water supply on the Colorado River and to help reestablish a balance in the supply-demand equation of water in an era of megadrought, climate change, and high agricultural demand and increasing municipal demand.
The first thing that’s important for folks to realize is that this is a proposal. What was announced was essentially an agreement among the lower basin states — California, Nevada and Arizona — to propose a plan to reduce demand in those states. It will need to go through additional steps to identify more specifics, and then this proposal ultimately will need to be adopted by the seven affected states and then endorsed by the Bureau of Reclamation.
What the proposal does is lay out a framework to reduce water demand in the lower basin by about 3 million acre feet. And for context, one acre foot is about 325,000 gallons of water, or the amount of water used by two to four homes in the western United States per year. That reduction would be taken across multiple sectors: agriculture, tribal communities, and some municipal or urban users, most notably the Metropolitan Water District of California, which is the Los Angeles area.
The idea is to reduce demand through voluntary conservation. And then part of the package is compensation for some of that voluntary conservation in the form of funding from the federal government through the Inflation Reduction Act to the tune of about $1.2 billion. That is an absolutely critical part of the of the story: the Inflation Reduction Act has really enabled this breakthrough, because of the federal funding for those voluntary conservation measures.
Another critical part of the story was that recently the Bureau of Reclamation released what’s called a draft environmental impact statement, and it presented a couple of alternatives to the states for consideration. Those proposals gave us kind of a federal government’s perspective on the framework moving forward. It was essentially a classic negotiating tactic, where the Bureau of Reclamation said, “look, you states have yet to reach a consensus agreement, so we’re going to lay out a plan,” and, as is often the case, everybody was unhappy with parts of that plan.
That helped to stimulate additional negotiations and bring California, in particular, more to the table. So it’s a very important moment in time because it represents a turning point in multi-year negotiations between the states. Importantly, it lays out a path forward for a consensus agreement that is driven by the states as opposed to being imposed upon them by the federal government. So, we’re talking about a breakthrough in negotiations that led to a three-state proposal.
Well, that’s what we’re waiting to see. We don’t have all of those details yet.
Legally, the Bureau of Reclamation needs to go through this process, weigh the different alternatives, evaluate it, identify what they would call a preferred alternative, and then ultimately make a determination. But the Bureau of Reclamation has certainly indicated there’s initial support for this proposal and that the funding would be made available.
We don’t know who specifically would receive how much of that funding but we do know that it will be agriculturalists (essentially farmers and ranchers), some municipalities such as the Metropolitan Water District of California, and some Native American communities.
We are still engaged in what I would call incremental adaptation. This is adapting to the rapidly changing conditions that are presented by this 22-year-long drought, the so-called megadrought in the region. We are also adapting to the impacts of climate change. If you go back, you know, the 2007 agreement was an incremental update to deal with a very significant risk of shortage on the Colorado River system in 2000 to 2005. We had the drought contingency planning process in 2019 that was another incremental adaptation at that time that was meant to get us to 2026, when the current guidelines expire. Environmental conditions continue to rapidly change, while the demand side continues to stay high. And while we’ve made a number of efficiency gains and voluntary reductions, the river is simply over-allocated for the flow that we have seen, especially since the turn of the millennium.
So we’ve been engaging in a series of incremental adaptations. Now, there’s nothing wrong with that. That’s a very smart strategy as you move along, right? You’re incrementally adapting your policy to reflect the changing environmental and social conditions. This is another important incremental adaptation that will hopefully allow us to keep working towards the 2026 guidelines.
What I and many others argue is that we need a more transformative adaptation, we need a more significant restructuring. Now, it’s difficult to do that right now in the midst of a very short-term risk. But eventually, between now and 2026, we need to address some of the structural imbalance, or deficit, in the river. We have over-allocated the river in this era of increasing drought and climate change.
We’ve got to restructure the demand over the course of the next several years, and that’s going to require more transformational kinds of changes. But I also want to point out that’s not limited to reducing demand, right? You can do that through dramatic increases in efficiency. We can produce the same units of product, whether that be food or microchips or homes or businesses, with significantly less water.
The most effective strategy is efficiency. It’s the cheapest. It does not require significantly new infrastructure or new water augmentation. And there are lots of good stories out there, in creating more efficiencies and creating more flexible policies and more adaptability within the way that we manage water. We’ve got to sort of wring every cool new approach we can out of the system.
One that I think is really important is that the city of Phoenix and several of its regional partners in central Arizona are in the planning stages of moving towards an advanced water-purification process. What that means is it would allow the cities to pool their wastewater resources, their effluent, and then be able to treat that water through advanced water purification so we can reuse that water for municipal use. We call that direct, potable reuse of the water.
Central Arizona is incredibly efficient, we reuse about 90% of all the wastewater that we produce in the central Arizona region for power production, for urban irrigation, for agriculture, etc. But we can actually reuse that water to support households and businesses. We can then use that water again. Some of it is consumed by people, but basically cycling the water through the city as many times as possible reduces the need for new raw water.
So the current proposal that’s in the process of being developed by the City of Phoenix Water Services Department is for advanced water purification that, according to the current estimates, would produce about 60,000 gallons of water a day for City of Phoenix residents from wastewater. And so, that’s one way we can be much more efficient in recycling and reusing our water.
I do think it gets to the need for greater public understanding and then, you know, individual and collective action. In single family residential households, for example, 50% or more, on average, of the water use is outside the home for things like residential landscaping and swimming pools. In the Phoenix area, we’ve seen a really significant trend in reducing water demand inside single family homes, thanks to technologies like low water-use toilets and more efficient washing machines and dishwashers and so on. The next frontier is getting more progressive with the way we manage residential landscaping water. And that's something that every individual household can do.
The Southern Nevada Water Authority, the Las Vegas Regional Authority, has been really at the forefront of these kinds of strategies with turf buyback programs, incentivizing homeowners, and creating all sorts of both incentives and policies to reduce that outdoor residential demand. And that’s something where individual households can be empowered.
No, I really don’t. It’s about a sort of risk management in the short term, and then crafting new policy approaches and new management strategies over the long term. So I don’t think these get in the way of each other. The 2019 agreement essentially bought us some time, and this round of proposals and anticipated agreements will continue to buy us some time.
Do I think we need more adaptation, and more significant changes? Absolutely. But I would never criticize these incremental plans, because they’re absolutely necessary to manage short-term risk.
Without these actions, there was a plausible scenario where levels in the reservoirs could drop below the minimum power pool, meaning we wouldn’t be able to create power out of the Hoover Dam. In [the Bureau of Reclamation’s] 24-month studies, we began to see scenarios in which the lake levels dropped below the intakes, meaning we wouldn’t be able to deliver Colorado River water whatsoever to the states.
When you start to see these highly undesirable scenarios where you lose the ability to produce power, you potentially even lose the ability to deliver any water at all from the Colorado system to Arizona, California, or Nevada, you know you’ve got to act and engage in short-term risk management.
The risk that we’ve always seen is that you get some relief from the kind of very strong winter precipitation in the Rocky Mountains and in California that we had this year. But as a colleague says, we cannot let one good winter take the pressure off. I never want to root against good news, and the winter precipitation and the new proposal and potential agreements are good news. But you got to keep the pressure on and keep the emphasis on the long-term strategies.
[Laughs] Yes.
Well, I think you can look at it both ways. Yes, there was the intention that the 2019 plans would get us to 2026. Turns out the 2019 plans got us through 2022. That’s just the reality we’re in. Do I wish the 2019 plans would have gotten us to 2026? Yes. But without the 2019 plans, we would have been at risk of minimum power pool levels even earlier.
I was hopeful the 2007 plans would get us to 2026. But the reality is that the climate is changing, the drought has just been incredibly persistent. I mean, we now know from looking at reconstructions of the past climate that this 22-year period is the driest period in our region in the last 800 years for certain, and very likely in the last 1,200 years. That’s an exceptional period of drought. And so, by some measures, you know, it’s pretty remarkable what the water management community has done to manage the risk without significant disruption to the region. So in some ways, it’s a success story.
The single most important thing everyone recognizes is that we really need to chart a new path forward for agriculture. Particularly for agriculture in the lower basin, and even more specifically for non-food forage crops in the lower basin.
We still use two-thirds or more of our water in the lower basin for agriculture, and most of that is used for forage crops, like alfalfa, which feed livestock. So we very much need to restructure the agricultural sector in the lower basin and think about prioritization of certain types of agriculture in certain locations. And importantly, we need to work with agricultural communities, with landowners and businesses, to help them transition to a future that recognizes there’s less water available. And, you know, this is the challenge that we face: How do we make an intentional, thoughtful, supportive transition to a new, more efficient, and more appropriate type of agriculture in the West?
This region is in an amazing region to grow alfalfa if you have water. And so, there’s lots of rational choices that were made along the way. But in an era of significantly reduced water availability, it is simply not sustainable for us to continue to use that much of our available water for agriculture, and in particular for forage crops mostly to support cattle. And so this has to change.
I fully recognize, though, that these are private property rights, and there needs to be a process for this. We can’t just simply have a situation like what we saw in the Midwest where we just move all of our manufacturing overseas and abandon entire swaths of the country. We have to think about how we can help, whether it’s through compensation, community planning, capacity building, job transitions, etc. But that’s the biggest part of the solution. We need to be very thoughtful about that.
I think one of the key things we really need to get into the planning process [for 2026] is greater adaptability and greater flexibility so we’re able to respond to changing conditions. Under the current guidelines there is a priority rights process where we would have [hypothetically] seen the reduction of essentially all — 100% — of Arizona’s allocation of the Colorado River, before any of California’s rights were reduced. But it seems implausible to eliminate the Colorado River water supply to Phoenix, which is the fifth largest city in the country. These are the third rails of water politics. We have to rethink the way that these water allocation decisions are made, and we’ve got to be much more flexible, much more adaptable, and really think about how we can respond to climate and water conditions.
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On power plant emissions, Fervo, and a UK nuclear plant
Current conditions: A week into Atlantic hurricane season, development in the basin looks “unfavorable through June” • Canadian wildfires have already burned more land than the annual average, at over 3.1 million hectares so far• Rescue efforts resumed Wednesday in the search for a school bus swept away by flash floods in the Eastern Cape province of South Africa.
EPA
The Environmental Protection Agency plans to announce on Wednesday the rollback of two major Biden-era power plant regulations, administration insiders told Bloomberg and Politico. The EPA will reportedly argue that the prior administration’s rules curbing carbon dioxide emissions at coal and gas plants were misplaced because the emissions “do not contribute significantly to dangerous pollution,” per The Guardian, despite research showing that the U.S. power sector has contributed 5% of all planet-warming pollution since 1990. The government will also reportedly argue that the carbon capture technology proposed by the prior administration to curb CO2 emissions at power plants is unproven and costly.
Similarly, the administration plans to soften limits on mercury emissions, which are released by burning coal, arguing that the Biden administration “improperly targeted coal-fire power plants” when it strengthened existing regulations in 2024. Per a document reviewed by The New York Times, the EPA’s proposal will “loosen emissions limits for toxic substances such as lead, nickel, and arsenic by 67%,” and for mercury at some coal power plants by as much as 70%. “Reversing these protections will take lives, drive up costs, and worsen the climate crisis,” Climate Action Campaign Director Margie Alt said in a statement. “Instead of protecting American families, [President] Trump and [EPA Administrator Lee] Zeldin are turning their backs on science and the public to side with big polluters.”
Fervo Energy announced Wednesday morning that it has secured $206 million in financing for its 400-megawatt Cape Station geothermal project in southwest Utah. The bulk of the new funding, $100 million, comes from the Breakthrough Energy Catalyst program.
Fervo’s announcement follows on the heels of the company’s Tuesday announcement that it had drilled its hottest and deepest well yet — at 15,000 feet and 500 degrees Fahrenheit — in just 16 days. As my colleague Katie Brigham reports, Fervo’s progress represents “an all too rare phenomenon: A first-of-a-kind clean energy project that has remained on track to hit its deadlines while securing the trust of institutional investors, who are often wary of betting on novel infrastructure projects.” Read her full report on the clean energy startup’s news here.
The United Kingdom said Tuesday that it will move forward with plans to construct a $19 billion nuclear power station in southwest England. Sizewell C, planned for coastal Suffolk, is expected to create 10,000 jobs and power 6 million homes, The New York Times reports. Sizewell would be only the second nuclear power plant to be built in the UK in over two decades; the country generates approximately 14% of its total electricity supply through nuclear energy. Critics, however, have pointed unfavorably to the other nuclear plant under construction in the UK, Hinkley Point C, which has experienced multiple delays and escalating costs throughout its development. “For those who have followed Sizewell’s progress over the years, there was a glaring omission in the announcement,” one columnist wrote for The Guardian. “What will consumers pay for Sizewell’s electricity? Will it still be substantially cheaper in real terms than the juice that will be generated at Hinkley Point C in Somerset?” The UK additionally announced this week that it has chosen Rolls-Royce as the “preferred bidder” to build the country’s first three small modular nuclear reactors.
The European Union on Tuesday proposed a ban on transactions with Nord Stream 1 and 2 as part of a new package of sanctions aimed at Russia, Bloomberg reports. “We want peace for Ukraine,” the president of the European Commission, Ursula von der Leyen, said at a news conference in Brussels. “Therefore, we are ramping up pressure on Russia, because strength is the only language that Russia will understand.” The package would also lower the price cap on Russian oil to $45 a barrel, down from $60 a barrel, von der Leyen said, as well as crack down on Moscow’s “shadow fleet” of vessels used to transport sanctioned products like crude oil. The EU’s 27 member states need to unanimously agree to the package for it to be adopted; their next meeting is on June 23.
The world’s oceans hit their second-highest temperature ever in May, according to the European Union’s Earth observation program Copernicus. The average sea surface temperature for the month was 20.79 degrees Celsius, just 0.14 degrees below May 2024’s record. Last year’s marine heat had been partly driven by El Niño in the Pacific, so the fact that the oceans remain warm in 2025 is alarming, Copernicus senior scientist Julien Nicolas told the Financial Times. “As sea surface temperatures rise, the ocean’s capacity to absorb carbon diminishes, potentially accelerating the build-up of greenhouse gases in the atmosphere and intensifying future climate warming,” he said. In some areas around the UK and Ireland, the sea surface temperature is as high as 4 degrees Celsius above average.
Image: Todd Cravens/Unsplash
The Pacific Island nation of Tonga is poised to become the first country to recognize whales as legal persons — including by appointing them (human) representatives in court. “The time has come to recognize whales not merely as resources but as sentient beings with inherent rights,” Tongan Princess Angelika Lātūfuipeka Tukuʻaho said in comments delivered ahead of the U.N. Ocean Conference in Nice, France.
Microsoft, Amazon, Google, and the rest only have so much political capital to spend.
When Donald Trump first became a serious Presidential candidate in 2015, many big tech leaders sounded the alarm. When the U.S. threatened to exit the Paris Agreement for the first time, companies including Google, Microsoft, Apple, and Facebook (now Meta) took out full page ads in The New York Times and The Wall Street Journal urging Trump to stay in. He didn’t — and Elon Musk, in particular, was incensed.
But by the time specific climate legislation — namely the Inflation Reduction Act — was up for debate in 2022, these companies had largely clammed up. When Trump exited Paris once more, the response was markedly muted.
Now that the IRA’s tax credits face clear and present threats, this same story is playing out again. As the Senate makes its changes to the House’s proposed budget bill, tech giants such as Microsoft, Google, Meta, and Amazon are keeping quiet, at least publicly, about their lobbying efforts. Most did not respond to my request for an interview or a statement clarifying their position, except to say they had “nothing to share on this topic,” as Microsoft did.
That’s not to say they have no opinion about the fate of clean energy tax credits. Microsoft, Google, Meta, and Amazon have all voluntarily set ambitious net-zero emissions targets that they’re struggling to meet, largely due to booming data center electricity demand. They’re some of the biggest buyers of solar and wind energy, and are investing heavily in nuclear and geothermal. (On Wednesday morning, Pennsylvania’s Talen Energy announced an expanded power purchase agreement with Amazon, for nearly 2 gigawatts of power through 2042.) All of these energy sources are a whole lot more accessible with tax credits than without.
There’s little doubt the tech companies would prefer an abundant supply of cheap, clean energy. Exactly how much they’re willing to fight for it is the real question.
The answer may come down to priorities. “It’s hard to overstate how much this race for AI has just completely changed the business models and the way that these big tech companies are thinking about investment,” Jeff Navin, co-founder of the climate-focused government affairs firm Boundary Stone Partners, told me. “While they’re obviously going to be impacted by the price of energy, I think they’re even more interested and concerned about how quickly they can get energy built so that they can build these data centers.”
The tech industry has shown much more reluctance to stand up to Trump, period, this time around. As the president has moved from a political outsider to the central figure in the Republican party, hyperscalers have increasingly curried his favor as they advocate against actions that could pose an existential risk to their business — think tighter regulations on the tech sector or AI, or tariffs on key supplies made in Asia.
As Navin put it to me, “When you have a president who has very strong opinions on wind turbines and randomly throws companies’ names in tweets in the middle of the night, do you really want to stick your neck out and take on something that the president views as unpopular if you’ve got other business in front of him that could be more impactful for your bottom line?”
It is undeniably true that the AI-driven data center boom is pushing these companies to look for new sources of clean power. Last week Meta signed a major nuclear deal with Constellation Energy. Microsoft is also partnering with Constellation to reopen Three Mile Island, while Google and Amazon have both announced investments in companies developing small modular reactors. Meta, Google, and Microsoft are also investing in next-generation geothermal energy startups.
But while the companies are eager to tout these partnerships, Navin suspects most of their energy lobbying is now being directed towards efforts such as permitting reform and building out transmission infrastructure. Publicly available lobbying records confirm that these are indeed focus areas, as they’re critical to bringing data centers online quickly, regardless of how they’re powered and whether that power is subsidized. “They’re not going to stop construction on an energy project that has access to electricity just because that electricity is marginally more expensive,” Navin told me. “There’s just too much at stake.”
Tech companies have lobbied on numerous budget, tax, sustainability, and clean energy issues thus far this year. Amazon’s lobbying report is the only one to specifically call out efforts on “renewable energy tax credits,” while Meta cites “renewable energy policy” and Microsoft name-drops the IRA. But there’s no hard and fast standard for how companies describe the issues they’re lobbying on or what they’re looking to achieve. And perhaps most importantly, the reports don’t disclose how much money they allot to each issue, which would illuminate their priorities.
Lobbying can also happen indirectly, via industry groups such as the Clean Energy Buyers Association and the Data Center Coalition. Both have been vocal advocates for preserving the tax credits. The Wall Street Journal recently detailed a lobbying push by the latter — which counts Microsoft, Amazon, Meta, and Google among its most prominent members — that involved meetings with about 30 Republican senators and a letter to Senate Majority Leader John Thune.
DCC didn’t respond to my request for an interview. But CEBA CEO Rich Powell told me, “If we take away these incentives right now, just as we’re getting the rust off the gears and getting back into growth mode for the electricity economy, we’re really concerned about price spikes.”
The leader of another industry group, Advanced Energy United, shared Powell’s concern that passing the bill would mean higher electricity prices. Taking away clean energy incentives would ”fundamentally undercut the financing structure for — let’s be frank — the vast majority of projects in the interconnection queue today,” Harry Godfrey, the managing director of AEU, told me.
Being part of an industry association is by no means a guarantee of political alignment on every issue. Microsoft, Google, Meta, and Amazon are also members of the U.S. Chamber of Commerce — by far the largest lobbying group in the U.S. — which has a long history of opposing climate action and the IRA itself. Apple even left the Chamber in 2009 due to its climate policy stances.
But Powell and Godfrey implied that the tech giants' views are — or at least ought to be — in alignment with theirs. “Many of our members are lobbying independently. Many of them are lobbying alongside us. And then many of them are supporting CEBA to go and lobby on this,” Powell told me, though he wouldn’t reveal what actions any specific hyperscalers were taking.
Godfrey said that AEU’s positions are “certainly reflective of what large energy consumers, notably tech companies, have been working to pursue across a variety of technologies and with applicability to a couple of different types of credits.”
And yet hyperscalers may have already spent a good deal of their political capital fighting for a niche provision in the House’s version of the budget bill, which bans state-level AI regulation for a decade. That would make the AI boom infinitely easier for tech companies, who don’t want to deal with a patchwork of varying regulations, or really most regulations at all.
On top of everything else, big tech in particular is dealing with government-led anti-trust lawsuits, both at home and abroad. Google recently lost two major cases to the Department of Justice, related to its search and advertising business. A final decision is pending regarding the Federal Trade Commission’s antitrust lawsuit against Meta, regarding the company’s acquisition of Instagram and WhatsApp. Not to be outdone, Amazon will also be fighting an antitrust case brought by the FTC next year.
As these companies work to convince the public, politicians, and the courts that they’re not monopolistic rule-breakers, and that AI is a benevolent technology that the U.S. must develop before China, they certainly seem to be relinquishing the clean energy mantle they once sought to carry, at least rhetorically. We’ll know more once all these data centers come online. But if the present is any indication, speed, not green electrons, is the North Star.
Editor’s note: This story has been updated to reflect Amazon’s power purchase agreement with Talen Energy.
The new funding comes as tax credits for geothermal hang in the balance.
The good news is pouring in for the next-generation geothermal developer Fervo Energy. On Tuesday the company reported that it was able to drill its deepest and hottest geothermal well to date in a mere 16 days. Now on Wednesday, the company is announcing an additional $206 million in financing for its Cape Station project in Utah.
With this latest tranche of funding, the firm’s 500-megawatt development in rural Beaver County is on track to deliver 24/7 clean power to the grid beginning in 2026, reaching full operation in 2028. The development is shaping up to be an all-too-rare phenomenon: A first-of-a-kind clean energy project that has remained on track to hit its deadlines while securing the trust of institutional investors, who are often wary of betting on novel infrastructure projects.
The bulk of this latest financing comes from the Bill Gates-backed Breakthrough Energy Catalyst program, which provided $100 million in project-level equity funding. The energy and commodity trading company Mercuria provided $60 million in corporate loans, increasing its existing fixed-term loan from $40 million to $100 million. An additional $45.6 million in short-term debt financing came from XRL-ALC, an affiliate of X-Caliber Rural Capital, which provides loans to infrastructure projects in rural areas. That comes on top of a previous $100 million loan from the firm.
The plan is for Cape Station to deliver 100 megawatts of grid power in 2026, with the additional 400 megawatts by 2028. The facility has the necessary permitting to expand production to two gigawatts — twice the size of a standard nuclear reactor. And on Monday, the company announced that an independent report from the consulting firm DeGolyer & MacNaughton confirms that the project could expand further still — eventually supporting over 5 gigawatts of clean power at depths of up to 13,000 feet. The company’s latest drilling results, which reached 15,765 feet at 520 degrees Fahrenheit, could push the project’s potential power output even higher.
Traditional geothermal wells normally max out at around 10,000 feet, and must be built in locations where a lucky confluence of geological features come together: high temperatures, porous rock, and naturally occurring water or steam. But because Fervo can drill thousands of feet deeper, it’s able to access hot rocks in locations that weren’t previously suitable for geothermal development, pumping high-pressure water down into the wells to fracture rocks and thus create its own geothermal reservoirs.
The primary customer for Fervo’s Cape Station project is Southern California Edison, which signed a 320-megawatt power purchase agreement with the company last year, advertised as the largest geothermal PPA ever. Shell was also announced as a customer this year. Fervo is already providing 3.5 megawatts of power to Google via a pilot project in Nevada, which it’s seeking to expand, entering into a 115 megawatt PPA with NV Energy and the tech giant to further build out production at this location.
Fervo’s latest funding comes on top of last February’s $244 million Series D round led by Devon Energy, as well as an additional $255 million in corporate equity and debt financing that it announced last December. On top of investments from well known climate tech venture firms such as Breakthrough Energy Ventures and Galvanize Climate Solutions, the company has secured institutional investment from Liberty Mutual as well as public pension funds such as the California State Teachers’ Retirement System and the Canada Pension Plan Investment Board.
Fervo, like all clean energy startups, also stands to benefit greatly from the Inflation Reduction Act’s clean energy tax credits, which are now in jeopardy as President Trump’s One Big, Beautiful Bill works its way through the Senate. While Secretary of Energy Chris Wright has traditionally been a booster of geothermal energy and is advocating to keep tax incentives for the technology in place through 2031, the bill as it stands would essentially erase incentives for all geothermal projects that start construction more than 60 days after the bill’s passage.
Fervo broke ground on Cape Station in 2023, so that project will make the cut. For future Fervo developments, it’s much less clear. But for now, the company seems to be flush with cash and potential in a climate tech world awash in ill omens.